The Columbia SC housing recovery seems to be seeing a bottom finally getting closer, but getting there remains dicey. Home sales are steady, more sellers are lowering their prices and the inventory of homes for sale is dropping.
Unfortunately, the inventory doesn’t include the so-called “shadow inventory” of both distressed properties and those still held by owners who are underwater, owing more than their home is worth, and at risk for default.
Columbia SC Housing Sales Up
No doubt, sales of existing homes are up, according to the National Association of Realtors’ (NAR) latest Trend Report.
Another thing affecting the Columbia SC housing recovery is inventory. Inventories are expected to increase in the coming months as lenders process and list the huge backlog of distressed properties freed by the recent multi-state attorneys general agreement.
The shadow foreclosure inventory is considerably higher than the total inventory on the market today. Unless properly managed, the disposition of such properties could easily undermine the progress that has been made to date, this also according to NAR.
Radar Logic agrees. “The Columbia SC housing price and sales trends observed in 2011 are consistent with sellers dropping their prices to meet bids from bargain-hunting buyers,” and that’s eating away at inventories, Radar reports.
Would-be Columbia SC home buyers are still experiencing difficulty accessing mortgage financing. While rates remain near record lows, lenders remain risk averse and underwriting standards remain extremely strict.
What is your opinion about the Columbia SC housing recovery? Is a bottom near? Or do we still have a ways to go?
Closing costs are a list of charges you will have to pay on the closing date that is set for your Columbia SC home. Many people are surprised at the additional costs over and above the price of the home.
Closing costs will vary from area to area, but a good rule of thumb is to plan for at least 1.5% of the purchase price for closing costs in addition to the down payment. It’s not a bad idea to allow 2.5% for closing costs, just to be on the safe side.
Closing Costs Broken Down
Here are some of the closing costs you may encounter depending on your specific situation. Use this as a guideline then talk with your lawyer or closing agent, who can provide a more realistic estimate for your situation.
Land Survey Fee or Title Insurance Fee
A recent survey of the property is usually required by lenders. If one is not available the cost can range between $600 – $900 for a new survey. In lieu of the survey most lenders today will accept title insurance which can cost considerably less.
Appraisal Fee
An appraisal provides the lender with a professional opinion of the market value of your Columbia SC home. This cost is normally the responsibility of the homeowner and it can cost between $200 and $500.
Home Inspection
A professional inspection of the home, top to bottom, is for the benefit of the buyer. A home inspection can cost anywhere from $250 – $400 and is well worth the investment. When hiring a home inspector make sure the inspector has liability insurance just in case they overlook something.
Homeowner Insurance
Mortgage lenders require a certificate of insurance to be in place from the time you take possession of the home. The amount required is generally the amount of the mortgage or the replacement cost of the home. This cost can vary on the property size, amount of coverage, the insurance company and the municipality.
Mortgage Insurance
If your mortgage is insured, you will be required to pay the applicable taxes on the insurance premium at closing. While the insurance premium can be added to the mortgage amount, the tax must be paid at closing, where applicable.
Land Transfer Tax
Most provinces charge a land transfer tax payable by the purchaser. The amount varies depending on the province. Land transfer tax is based on the purchase price. First time home buyers purchasing a new or re-sale home may be entitled to a refund.
Legal Costs and Disbursements
Lawyers and notaries charge fees for their services involved in preparing the deed, preparing the mortgage, and conducting the various searches. Disbursements are out-of-pocket expenses incurred during the process such as registrations, searches, and supplies.
Closing Adjustments
An estimate should be made for closing adjustments for bills the seller has prepaid such as property taxes, utility bills, and other charges. Any bills after the closing date are the responsibility of the purchaser. A lawyer will let you know what they are once research has been completed. You will be given what is known as a “Good Faith Estimate” of closing costs prior to your closing so you will know exactly how much money you’ll need to bring to closing.
If you have any questions about closing costs on your Columbia SC home, just use the comment box below or click over to our website and contact us there.
Not long ago, buying a Columbia SC home was the best investment you could make. Not only did it provide a place to live, but it provided instant wealth for many homeowners through rapid home-price appreciation. Renting seemed risky. If you didn’t own a Columbia SC home, you’d miss out on equity buildup that would bankroll a move to a bigger, better home.
In this market, the realistic way to look at buying a Columbia SC home is to secure a place you want to live. Buying a Columbia SC home doesn’t guarantee you’ll make a big return on your investment. You might if you stay long enough. Over the long term, home-price appreciation usually outpaces the inflation rate. However, this varies from one locale to the next.
If Your Columbia SC Home Doesn’t Work Out
If you buy a Columbia SC home that you find out doesn’t work for you and sell it again within a year or so, there’s a chance you’ll lose money when you take into account the costs of buying and selling.
No one knows for sure when the economy will substantially improve. Last year, some economists predicted a double-dip recession. That appears to be less risky at the moment. In the fourth quarter of 2011, the nation’s economic output grew at an annualized rate of 2.8 percent, which is not recession territory, but is not considered good enough by some economists.
Columbia SC Home Market Prediction
Will 2012 be the turnaround year for housing? Lawrence Yun, the National Association of Realtor’s (NAR) chief economist, thinks that the combination of increasing home sales, record-low interest rate and low home prices “demonstrates a market in recovery.”
Other good news for anyone thinking of buying a Columbia SC home is the recent increase in consumer confidence and the decrease in the inventory of homes for sale to a level not seen since March 2005, according to NAR. Yun thinks the drop in inventory will contribute to price stabilization and possible modest price growth in the near future.
Problems for Columbia SC Home Buyers
There is pent-up demand on both the buy and sell side. One problem for those considering buying a Columbia SC home has been the lack of quality inventory. That may improve this year as some sellers decide they’re tired of waiting for a better time to sell.
Buyers have the advantage of low interest rates and home prices. Buyers considering buying a Columbia SC home who can find the right house and stay put for five to 10 years will probably be happy they bought now.
If you are in the unfortunate financial position where you are losing your Columbia SC home due to foreclosure or short sale, your credit score is probably going to take a pretty hard hit.
In “normal times,” this could make it really tough to rent your next place of residence. Luckily, these are not “normal times” and most landlords are understanding of renters’ financial distress.
Losing Your Columbia SC Home, Better Days are Within Reach
Whether you believe it right now or not after losing your Columbia SC home, better days are within reach. To prepare for those better days take steps now to minimize the damage to your credit, your rental prospects and your future.
Just because you are defaulting on your mortgage, don’t default on other bills. You still need to pay your cell phone, cable TV, car loan, etc. while you are in the process of working out the details of losing your Columbia SC home.
Each additional account you default upon will further hurt your credit score, so keep up the payments if you can.
Losing Your Columbia SC Home? Consider a Short Sale
Rather than just losing your Columbia SC home to foreclosure, consider a short sale, which will do less damage to your credit score. A short sale will allow you to relinquish your debt in writing as well as get rid of uncertainty and stress. Negotiating a short sale should give you much better chances as opposed to just letting it go to foreclosure.
Banks are also very open to short sales these days and working with the bank should bring the best outcome to everyone. Your new landlord will also highly value the fact that you tried to mitigate damages by doing a short sale and taking care of your property during the process.
Never Get an Eviction
Lastly, don’t ever get an eviction on your record. If you are losing your Columbia SC home to foreclosure, work with the lender for an orderly move out. It might be nearly impossible to explain to a potential new landlord why an eviction should be overlooked by them.
When looking for a new place to rent, explain your situation and how you only defaulted on your house but not any other responsibilities. Tell them how you handled it maturely and left the house in good condition. Provide the landlord clear evidence that you will take care of their property as well. Doing these things will give you the best chance of being approved for the rental.
Renting after losing your Columbia SC home is much easier these days than in the past. Being professional and responsible, in all aspects of what undoubtedly will be a painful and uncomfortable process, should allow you to find a new place to rent and hopefully start to rebuild your creditworthiness.
There are certainly more than 5 benefits to owning a Columbia SC home. Yet some first-time buyers are skeptical of buying a home with the uncertainty surrounding the housing market.
The uncertainty many refer to when talking about the housing market involves the magic date when home values will start to increase again. Since no one knows when this may occur, the word uncertainty (when paired with the housing market) often reveals a negative connotation.
These are just 5 of the many reasons for buying a home this year:
Appreciation – Buying a home now (at current interest rates) can almost ensure your home’s appreciation in the future. Mortgage rates have never been lower and home prices in many parts of the country are down. This is the perfect recipe for home appreciation. In addition, many foreclosed homes are available for a fraction of the original cost. This can translate to a higher profit if you decide to sell once the market rebounds.
Property Tax Deductions – Real estate property taxes for a primary home and vacation home are fully tax deductible. The IRS provides detailed tax information for first-time buyers that may answer many questions about what deductions homeowners are eligible for.
Preferential Tax Treatment – If you own your home for more than a year and receive more profit than the allowable exclusion after the sale of your home, the profit will be considered a capital asset. Capital assets are given preferential tax treatment.
Building Equity – Many factors such as credit qualification, loan flexibility, and annual percentage rate (APR) contribute to the final decision of what type of mortgage loan best fits your goals. Yet, a new trend being used by some homeowners is to actually add money to their monthly payment to decrease the principal balance of their loans at a much faster pace. This trend is called equity building. Equity builders usually select a home loan with a lower interest rate (and a shorter term loan such as a 15-year fixed) to help build equity faster. This rapid payment process allows borrowers to:
- Pay off the principal balance faster
- Lock in near-record-low interest rates
- Shorten the length of their home loan
- Own their home faster
- Pay substantially less mortgage interest
Home equity is the largest single source of household wealth for most Americans.
Pride – Homeownership offers many benefits to many different types of people. For some homeowners, playing their music as loud as they want and painting the walls the color of their choice is a perk. For others, homeownership will permit them to build an NBA regulation size basketball court on their own property. For others, home ownership may allow them to build the indoor swimming pool of their dreams. No matter who you are, homeownership is a purchase, commitment, and journey that’s sure to bring you pride.
When the uncertainty surrounding the Columbia SC housing market fades and the market rebounds, homeownership may in fact transform that pride of ownership into profit through selling your little corner of the world.